Not happy with pension broker - what can i do

viztopia

I have recently reached retirement age and I have taken my 25% tax free from my pension plan. I then placed the balance in an arf and armf. However my pension broker told me that I would be able to get a better "allocation" if i invested in such a fund. This did not materialise. He urged me to do this as it would cover his commission and then i would be no worse off and everybody would be happy. He then took 4.5% commission on the investments in the arf and armf which is double what he originally said. All of this was verbal and he never put anything in writing so there is probably not much i can do on this. I rang him and complained and threatened to switch the arf and armf as i thought that it he were no longer the agent there may be a claw back on the commissions paid to him. he laughed at me and said that commissions were paid when the money was invested and that if i switched there would be no charge to him. he also said that the fund would lose alot of value if i movedto another provider. I have checked the policy documents and I am now outside the cooling off period where i coudl change my mind as to the arf/armf. My question is this; Was he obliged as a broker to outline his fees/commissions in a letter to me his client and also they pension company needed photo ID to process the investemnt and I used my passport which is about 20years out of date. Could there be a legal loophole here whereby I could get all the money back from them as they used ID that was way out of date? Any repies would be appreciated.

FernandoTorres

This sounds a little strange. It's fairly common practice for brokers to organised a higher "allocation rate" with a life company, say 105%. That means that 105% of your premium will be invested but in most cases the broker will take some/all of the amount above 100% to cover their fee which is fair enough.

You say he then took an extra 4.5%. How do you know this, was it on a statement or anything. Can't understand any reason for doing this and can only think you may be confused with the part of the allocation he took?

viztopia

thanks Fernando for commenting. 100% of the funds available for investment were allocated to the arf/armf. 4.5% of this fund was taken as a broker payment. the pension is with Zurich and he had said that by investing in this fund he could get more than 100% allocation and he would take his fees out of this but it doest look like he did it this way. that is why i am really mad at him. and the broker concerned has a high ranking position with the Irish Brokers Association!

FernandoTorres

The key here is was the 4.5% taken before or after the ARF/AMRF was set-up. I'm not quite sure by your wording, if it was before then 100% of your fund was invested and the broker took 4.5% from Zurich as a fee.

If your fund was invested at 100% and THEN he took an extra 4.5% then this would be dodgy as you only got an allocation of 95.5%. You will see on your policy document the exact amount allocated and probably the %.

Pablo Sanchez

As Fernando said you should have received your 'Unit allocation statment' by this stage, it will show the allocation rate that pervailed on your ARF.

Your broker is obliged to provide a disclosure notice in advance of the investment which would also show the renumeration concering this product.

There may well be a commission clawback if you were to switch agents, if you are not affiliated to any other brokers get in touch with PIBA or the IBA and they will let you know who else in in your area.

viztopia

the broker that i am referring to has a very high ranking position in one of the above broker representative bodies!